Poseidon Med IIGeorge PolychroniouPoseidon Med II - Project Manager
Executive Director Strategy, Business Development, Administration & ITDEPA – Public Gas Corporation S.A.
8th East Med Marine and Oil & Gas Exhibition
Grand resort, Limassol CyprusApril 6, 2017
I. LNG as Marine Fuel
II. Poseidon Med II project
Content
I. LNG as Marine Fuel
II. Poseidon Med II project
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1990 2004 2018 2032
History Rivalry Vertigo Autonomy© 2016 IHS
Dol
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Average annual crude oil prices (real), 1990–2040
Source: IHS
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Oil Europe Contract
Europe Market Henry Hub
Asian Market Asian ContractSource: IHS
Comparative gas prices (Real), 2000-2040
$/M
MB
tu (
Re
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LNG in the international energy market
LNG globally commoditized
Increased decoupling of oil and gas prices
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Africa OECD Asia Non-OECD Asia CIS
Europe Latin America Middle East North America
LNG Demand (includes boil-off gas) (Mmtpa)
Global LNG Demand
LNG Demand growth under all scenarios
Non-OECD Asia is the main growth market
Europe remains the residual market
LNG demand as transportation fuel
grows in importance
6
-500
50100150200250300350400
MM
t
Australia Middle East
West Africa Russia
APAC (excl Australia) Other Africa
Latin America North America
Under construction
Incremental liquefaction capacity
Source: IHS, July 2016
Global LNG SupplyIn a low oil price environment
large projects at risk
Global liquefaction capacity dominated by North America and Australia
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Supply – Demand Balance
293 270 202
43 88 145
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2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Opportunity gap for all un-sanctioned projects
Total un-contracted LNG flows from existing and under construction projects
Contracted supply from existing and under construction projects
Global LNG demand
Contracted supply and viable un-contracted supply versus global LNG demand
Note: MMtpa = Million metric tons per annum of LNG. Does not include market-driven underutilization from global projects© 2016 IHS
MM
tpa
No more FIDs “needed” this decade
Buyers market
Reduced capacity utilization 80%-90% vs. 88% (in the period of 2000-2016)
• Recent decision of IMO/MEPC will speed up developments
• LNG competition with Low Sulphur Bunker Fuels and EGCS (scrubbers) but:
Competition depends on oil price level and LNG decoupling
LNG can offer compliance with potential future environmental regulation
(NOx, PM, COx)
Conversion Investments payback often < 5 years
LNG could be the most beneficial option for:
− Smaller vessels
− New builds
− Vessels operating on fixed routes (e.g. Container vessels, Ferries,
Cruise ships)
• Other issues also matter (safety, reliability)
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LNG as marine fuel
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LNG fueled Vessels
Excluding LNG carriers and inland waterway vesselsSource: DNV-GL, March 2016
There are currently 162 confirmed LNG ship fuel projects
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Interfuel Competition
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LNG Demand for Bunkering
Different views often diverging.Drivers that could speed up the
demand:
New environmental regulations
Availability and cost of ownership for other bunker fuels
Optimization of the SSLNG supply chain
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LNG Consumption as a bunker fuel
Source: BCG analysis
263 252 210155 116
23143
191 237
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2014 2015 2020 2025 2030
Shipping Industry
Conventional HFO cleaned by scrubbers LNG
Tons (millions)
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Need for Synergies
LNG as marine fuel Road transport sector
Off grid areas individual/remote consumers,
potential distribution companies
Power Generation Plants Vasilikos power plant/ Greek Aegean islands
I. LNG as Marine Fuel
II.Poseidon Med II project
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LNG at Ports
PiraeusPatra
HeraklionIgoumenitsa
LimassolVenice
3 Countries
6 Ports
GreeceItaly
Cyprus
Duration: Jun.2015 – Dec.2020
Budget: ~€53M
Coordinator: DEPA
Technical Coordinator:
DESFA
Partenrs: 26
Co-financed: 50% by EU - CEFConnecting EuropeFacility
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Activities
Project Organization Coordination – Management – Dissemination Social & Public Consultation – Awareness
Ports & LNG Terminal Infrastructure
Environmental/Safety/Site Studies – Ports Master Plans updating Supporting/Preliminary/Detailed Design Studies – Tender documents
Vessels Infrastructure Technical studies for selected vessels
Pilot case (Venice) Executive Design and Construction of an Innovative LNG Vessel
Financial aspects Installations Financial Assessment Financial Instruments for the Global Projects Investments
Regulatory framework Adaptation of the Regulatory Framework
Sustainability-Synergies Assessment of Efficient Supply Chain/Synergies Sustainable LNG Pricing Patterns
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Partners
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Progress in 2016
HAZID Workshops
Stakeholders Dissemination Events
Assessment and consultation process with selected shipyards
Special working groups for the formulation of Regulatory
Framework
Selection of 10 candidate vessels for retrofitting
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Progress in 2016
Preliminary layoutof the truck loading station
Specifications for the design of the LNG Feeder
Market research for other NG uses
Meetings with stakeholders to explore synergies
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Plans for 2017
Design of a Pilot Truck loading station on the island of Revithoussa LNG import terminal
Bunkering Vessel Designs
LNG As Fuel on new building Designs
Preliminary EIA for all ports and Revithoussa
Sub-Milestone)Technical recommendations detailing quantity and quality measurements across the LNG bunkering supply and custody transfer chain
Supporting (Baseline ) Engineering studies
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Poseidon Med II – Key considerations
Well known Project in the market
Wide interest in the project from local and international players
Need for intense effort for adapting the required legislative framework
European & national support on investments for ship-owners & infrastructure developers
Attention to infrastructure permitting and public acceptance
Rapid development of LNG technology provides new options
Pilot case will boost the implementation of the necessary infrastructure
Signs that Cruise shipping could be a very promising market
Economic benefits for final users depending also on economies of scale
• LNG: a fast growing fuel in a globally commoditized market, gradually delinked from oil
• A byers market in the short-medium term
• LNG for bunkering: The best choice especially for long term viewers
• Chicken – Egg problem creates uncertainty in the short term;
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Conclusions
Synergies are a possible way out &
Poseidon Med II could be a catalyst for market development
